Affordable Rents Now Available

As of January 2012 prospective PCHG tenants are now able to bid for or be nominated to properties charged at the Government’s new affordable rent level.To support the building of new homes, we have to let some properties at higher rents, called affordable rents.The higher rent will affect residents of our newly built homes and some of our existing homes for letting. It will not affect tenants currently paying rent to us.

There is no fixed amount for affordable rent, but as a guide, the rent is based on a calculation of market value for private rented homes. It will be no more than 80 per cent of the market value. Properties let at affordable rents will also be let for a fixed term of 10 years. 

We have produced some Frequently Asked Questions, which will hopefully answer any queries you may have.  

1. What does ‘affordable rent’ mean? 

The Government has introduced a new way of paying for housing associations to build extra homes (see question 3 below for more about this). For PCHG, as for other housing associations, it means charging higher rents for some existing properties. This higher rent is called ‘affordable rent’. The extra money raised by charging higher rent will be invested into building new homes. 

2. Which homes will be charged at the higher rate? How will I know if it affects me? 

If you are currently a PCHG tenant – that is, you live in one of our homes and pay rent to us – you will NOT be affected. Your rent will continue to be charged in the normal way, with annual increases applied in the normal way.

If you choose to move to another PCHG home, particularly a new build home, you may be affected. If this happens we would talk to you about how you could be affected before you move. 

The higher rent will affect residents of our newly built homes and some of our existing properties when they are re-let. It will affect you only if you are a new tenant to PCHG or if you are a current tenant but moving to another PCHG home which is newly built or offered under this scheme. 

3. Why is PCHG introducing affordable rent? 

Paragon, like every housing association, is subject to Government regulations around charging rent. The current Government has changed the rules it sets out. 

The new rules basically say that if we wish to build new homes in the future, we must now partly fund this through this programme of ‘affordable rents’. 

We know that we need to build new homes in the future. There is a very real housing need in the areas in which we work with thousands of people on the housing waiting list. So it is our responsibility to meet this need as far as we can. We also need to sustain and improve the quality of some of our existing homes for future tenants. 

That means that we must introduce affordable rent in line with these new Government regulations – as must most other housing associations in the same situation.  

4. How much higher will affordable rent be? 

There is no fixed amount for affordable rent, but as a guide the rent is based on a calculation of market value for private rented homes. 

Under current rules the new affordable rent rate will always be less than the market rental value of the same property. It will be no more than 80% of the market value. So, like current social rent, an affordable rent will still be cheaper than renting privately and will be eligible for Housing Benefits. 

5. Why is it called ‘affordable rent’ when it is actually going up? 

‘Affordable Rent’ is the Government’s term being used nationally. We are referring to ‘affordable rent’ so that residents, funders and other housing associations know what we mean. 

6. What else will change? 

In order to ensure that in future social housing is let to those who really need it, the new tenancies granted with an affordable rent will be for a fixed term of 10 years following the usual 12 month starter tenancy. 

7. What happens after the 10 years? 

At the end of the term PCHG will review whether the tenants still require social housing and whether the home still best meets their needs. Either another tenancy of 5 years will be granted, or other options will be proposed.